Note: This is a 2-part series of covering Location-based services in Indian context. Below is the 1st part & next part will be published tomorrow!

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If you ask yourself what made *Internet* your favorite hangout place, then surely the one-word answer would be dynamism. Dynamism of content & information in many forms has made internet the favorite destination for almost 1/4 of the world’s population.

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But now that has started creating problems for many of us. The problem primarily pertains to the information deluge we experience everyday while searching for any specific information. The problem is primarily driven by the availability of the vast number of tools that make publishing to the web a breeze but at the same time, consumption of that content has become a difficult task since lack of enough easy tools. So the classic case of demand v/s supply of information consumption & aggregation has created newer avenues for growth & innovation.

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Enter Location-based services – it provides enough context to information aggregation related to much basic needs we feel everyday and makes the dynamic floating content of the vast internet filtered in our hand-held devices. Let me explain:

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Location Based Services provide information related to local weather, restaurant, traffic etc which we need everyday. Not only this LBS can help us in people tracking, location enabled search & advertising (monetization for local publishers too) and other services like proximity based actuation or proximity based notification. Not to mention, the recently developed voice guided in car navigation or voice guided pedestrian navigation. These are some of the services which are quite prominent applications of LBS. I can’t help think of the possibility that LBS applications can be extended as real-time pocket friend who can provide minute-to-minute information for just about anything around me.

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Now that’s the possibility part of the story. A lot remains to be explored especially for Indian market viz. what about market acceptance, hardware costs, 3rd party developers married with incumbent network providers who’s responsibility in terms of bringing these services to end-users are most crucial. These are some of the questions we need to answer before proclaiming that LBS services are in as for Indian markets are concerned.

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Let me take each of these cases one by one:

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1. Market acceptance: Recently, GigaOm published an article where it mentioned that LBS apps are growing from all corners in virtual marketplaces like iPhone Appstore, Nokia’s Ovi store etc.

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Location Apps Market

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So clearly, it shows that LBS apps have gained enough acceptance. But I’m sure these stats are for developed markets like US. Can we say that same thing for Indian markets as well. Though we don’t have enough data for Indian LBS market but surely I came across these stats which provides enough confidence that LBS is catching up faster amongst Indian mobile users (Also I’ve seen many of my friends starting to use these services for daily needs). The stats tells that Indian LBS market spends will rise to $78.2 million by 2013 which by no means is a small number considering that presently the total Indian mobile advertising market is about $120 Mn approximately whereas globally LBS subscribers are expected to grow from 41 million in 2008 to 95.7 million in 2009 while revenue is anticipated to increase from $998.3 million in 2008 to $2.2 billion in 2009.

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2. Hardware Costs: In 2009, higher availability of GPS enabled phones and mobile application stores has driven the global consumer location-based services (LBS) subscribers and revenues. But in India, cost is a major barrier to mass adoption of such devices which in turn is blocking such services to be used. With days to come, I’m sure that hardware manufacturers will look at such avenues since the whole mobile industry is going through a cyclical changes where the network operators are benefiting more from add-on services and less from voice services. So much so, even the ARPU has fallen below Rs. 200 (i.e. ~US $4 per month). Hence lot of stress is being put on network operators which in turn might put pressure on hardware manufacturers to reduce their high-end GPS enabled phones to enable end users to avail such services.

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3. 3rd party Vendor market: Recently we are seeing considerable growth in mobile 3rd party vendors which renewed promise to revitalize the mobile industry and revolutionize communication. Now that’s a great step forward. But again this depends on network operators to marry these services and bring it to end users. But a considerable amount of mindset shift is required since the whole question is again pegged like a chicken & egg story for Indian market – i.e. Should we target some 4-5% of growing Indian smartphone market for such services or target whole mass market who are still happy with vanilla services like SMS or voice? Though data services is growing at breakneck pace in Indian market but still lot of things are expected post 3G auction which is in shambles for the last one & a half years. But frankly speaking, I don’t see immediate shift over of these telecom players towards data services post 3G auction too. But still hope is something we can’t leave as humans I guess!

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This is all I’ve for today’s post. Please come back again for the Next part in tomorrow’s post!